Pacific Investment Management Co. says market anxiety about the inflation-fighting credentials of the Federal Reserve is overdone and that US bond yields at current levels look attractive. Marc Seidner, chief investment officer of non-traditional strategies at the firm, expects the Fed to leave interest rates unchanged this year, despite markets pricing a 50% chance of a quarter-point hike at its next meeting. He points to moderating inflation and growth, and weakness in underlying data.\n\nSeidner argues that the Fed's credibility remains intact and that current yield levels present a compelling entry point for fixed-income investors. The Pimco executive notes that while near-term policy expectations may fluctuate, the broader trajectory supports a pause in rate increases.

Fiscal pressures, however, are likely to weigh on longer-dated Treasuries, causing the US yield curve to steepen over time.\n\nThe comments come as investors reassess the path of monetary policy amid mixed economic signals. Seidner's view suggests that the market's hawkish bias may be excessive, offering potential opportunities in bond markets.